Ron Shaich isn’t waiting for his deathbed to look back. Each year, the serial entrepreneur who helped build three iconic restaurant brands—Au Bon Pain, Panera Bread, and most recently Mediterranean restaurant chain Cava—conducts a “pre-mortem” that analyzes the life he’s living. He assesses his relationships, his health, his work, and his spirituality. And then Shaich, who will turn 70 later this year, makes a long-term plan for improvement.
That mindset was key to Shaich’s success. He set out in the 1990s with a 400-square-foot cookie store and turned it into Panera, the chain that now has 2,400 restaurants with $5 billion in annual revenue. He also pioneered the fast-casual concept, which is now a $100 billion–plus segment of the restaurant industry. He’s now investing in new restaurant concepts as part of his investment firm, Act 3.
Shaich looks back at his life in a new book, Know What Matters: Lessons from a Lifetime of Transformations and sat down with Fast Company to talk about what he has learned over those years and how the rest of the world could benefit from a long-term outlook. This conversation has been edited for content and clarity.
Tell me about this book and why you wrote it.
One of the theses of the book, which is very tied with these troubling times, is that things of value are created over the long term—and they all affect everything else. They’re not simplistic, and they’re key so often in running your life, in running a business, even in dealing with the sort of politics of what we see going on today in the Middle East. I don’t care whether you’re running a government, Congress, or a business, you’re informed by understanding what it is you’re trying to accomplish, what your long-term strategic plan is, how you’re going to get there, and how you bring the organization along in the process to get there.
At the highest level, I’ve certainly had, by all these conventional standards, tremendous success. That’s what people look at, but the reason I ended up writing the book was not about that. It was actually about the questions of discovering today what will matter tomorrow. How do you think about building high-quality organizations in a long-term sense? Much of what I write is actually drawn from life, not from business.
The book opens with an epiphany you had when your parents died. It prompted you to look at your life differently. How did that change you?
Taking the time to really figure out if you’re living a life you respect is not to be done on your deathbed. It’s in the sixth inning, the third inning, when you have a shot at changing things. When my parents died, I began to go through an annual process of sitting back every year and asking where I want to be in three, five, and seven years, in the context of my primary relationships with my spouse, my children, and my family. Secondly, my relationship with my body, my health. Third, my relationship with my work, in what I did with my work, and then fourth, my relationship with my own personal spirituality. I would write initiatives to get there and start checking it every quarter. It became the way in which I ran my businesses. We built organizational structure around those initiatives, so our calendar was informed not by your function, but informed by those key initiatives.
You said it’s more important to talk about the pain of building a successful business and not just the glory. Tell me more about that.
I wanted to talk about how you don’t own the business, the business owns you. That sense of responsibility—the pain of it all, the challenges—when you’re going through massive transformation. I remember getting out on Storrow Drive in Boston and saying “Oh my God, I have $6 billion of investors. I got 125,000 employees. I got all these communities, all these people that count on us. I don’t want to let them down.” I may have been the CEO and the largest shareholder, but I didn’t own the business— the business owned me. If you’re only talking about the glory of it, you are really failing.
You say one of your secrets is to just tell the truth. Do you feel like that happens less today in our culture?
That’s a societal question and a longitudinal question. What I believe deeply is that in many companies, in many places, and in many relationships, we don’t talk about the 800-pound gorillas. We avoid them, but those are the very issues we need to talk about. Tell yourself the truth. What is going on? Where are we at? What’s the reality? Where are we coming from? Based on that understanding, decide what’s going to matter over the next period of time. How do I organize my life around what’s going to matter? Lastly, which is also a challenge in much of corporate America, is getting it done. I’m always surprised by how often organizations, governments, and businesses don’t get done what they say they will. They get lost, and they don’t have the processes and discipline to get it done.
You’ve warned companies to be cautious about going public. Yet in June, you ushered one of your investment companies, Cava, a Mediterranean fast-casual restaurant chain, to an IPO. How do you feel about the public markets?
First and foremost, 90% of the founders or CEOs who take a company public ultimately live to regret it. You’re taking on infinitely more constituencies who have very different timeframes. Many investors are trading on the next inflection point, the next week’s pop—that’s all they were interested in, and our entire capital markets have become pervasively short term. Transformation is infinitely harder, because by its very nature it is long term.
For Cava, it was a great decision because Cava has the wherewithal to go in the long term and to be an industry defining company, and it has the management that’s capable of doing it. But it doesn’t mean everybody should go public.
You started Act 3 to provide companies with more long-term mindsets, right?
When I left Panera, I did some political work with No Labels, speaking about the pervasive short-termism in the capital markets. And I ultimately said “Ron, you better take some of your money and put your money where your mouth is.” That led to forming Act 3. We took $250 million from myself, and I put together some C-suite people who work with me.
We want ours to be the last financing event [our entrepreneurs] ever have to engage in. For too many people, financing’s become like a birthday event, or an annual event or lifecycle event. It’s crazy. They’re spending the time raising money, and they believe the valuations actually matter. The only thing that matters is when you buy and sell. We go in and take common stock and offer a right of first refusal on all follow-on rounds of capital. So far, we’ve never turned it down. All the founder has to do is call us, and we give them the capital at a pre-agreed multiple.
Most importantly, we practice what we call “sherpa management,” not venture capital. So we helped build these companies. All my partners are operators—not financial people. We have one financial person in the room. We’ve been there, we’ve done it. We’ve lived it. There’s an expression: It’s tougher to build a nationally dominant company than it is to climb Mount Everest. And the truth is nobody goes up Mount Everest without a sherpa.
You were in a lawsuit with Panera over noncompete clauses in hiring those former executives at Act 3. What happened with that? Did it make you bitter towards your former baby?
It was completely settled. I love Panera. I put my life in the Panera. I know many people still there. I want very much for Panera to fulfill its destiny.
More people talk about work-life separation in the post-COVID work world, but you chose to blend your work and home life. Why?
There is no such thing as balance. There are choices or trade-offs. We must face the fallacy of this idea that you can be present for your family all the time, you can be present at work and be a great employee, you can be physically fit. We all have to make choices. What I call for is to be clear about the choices you’re making. I wanted an integrated life, to be present where I was when I was there. I wanted to be present for my family when I was with them. I wanted to be present at work when I was there. I wanted to be present in my relationships when I was there. But having said that, I wanted—and I still want—my kids to know who I am and what I do. I found nothing more fun than when I was able to integrate the two and share with them.
You write about the importance of leading a meaningful life. What to you is a meaningful life?
I’m making a difference in the things I care about. To be honest, today, I’m feeling kind of bummed. I’m looking at the world and I’m going “Oh, my God, did we screw this up or what?” I’m sad that I made my life about having an impact and a positive impact, and broadly, we have Ukraine, Israel, our Congress is a disaster, our country can’t speak to each other, our kids are watching news on TikTok, climate change. The world is in a tough place. I just want to have felt like I left it better than when I came. I guess what really mattered to me in my little small world is the number of people’s lives I touched.
